08/03/2012 02:08 EDT | Updated 10/03/2012 05:12 EDT

Oil prices jump 5 per cent after US adds most jobs since February

NEW YORK, N.Y. - The price of oil posted its biggest gain in more than month, jumping nearly 5 per cent, after the government reported a sharp rise in jobs growth for July.

Benchmark U.S. crude on Friday rose $4.27 to end the day at US$91.40 per barrel in New York. Brent crude, which sets the price for oil imported into the U.S., climbed $3.04, or 2.9 per cent, to $108.94 per barrel in London.

Prices climbed after the government said U.S. employers added 163,000 jobs in July. Last month's hiring was the best since February, though it wasn't enough to drive down the unemployment rate. Prices for oil and gasoline tend to rise on signs of strength in the economy, which increases energy demand.

"There's a lot of optimism following the jobs report," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service. Also, the number of new jobs wasn't enough to dissuade investors that the U.S. Federal Reserve could take more action to spur growth, he said.

After rising sharply the first three weeks of July, the price of oil steadied as investors waited to see if central banks in the U.S. and Europe would announce new stimulus measures. On Friday, crude rose 4.9 per cent, the biggest one-day increase since June 29, when it rose 9.4 per cent.

In other energy futures trading, heating oil added 8.4 cents to finish at $2.926 per gallon while wholesale gasoline added 6.1 cents to finish at $2.931 per gallon. Natural gas was dropped 4.3 cents to finish at $2.877 per 1,000 cubic feet.